Monzo savings partner pauses products amid money laundering probe
OakNorth, a Monzo partner that provides savings products for the challenger bank, temporarily withdrew offers for new customers a fortnight after it emerged that the FCA had launched an investigation into the British digital bank over possible money laundering activity.
Challenger bank OakNorth, which is one of the lenders that have provided £1bn worth of savings products to Monzo customers, temporarily paused new savings products this week, while other lenders asked for further details on the bank’s customer checks.
“It is standard practice for us to conduct risk-based reviews with all partners, including when new information comes to light,” a spokesperson for OakNorth said.
“Following an initial review over the last two weeks, we have confirmed to Monzo that we will un-pause our 9 and 12-month Fixed term deposit products in its multi-bank marketplace. As with all of our partners, we will continue to have visibility of their policies and processes going forward.”
As of Saturday afternoon, only two of Monzo’s five savings partners had their fixed-term deposit product available on the challenger bank’s online savings hub – Paragon and Charter Savings Bank. OakNorth, Shawbrook and Investec were all “temporarily unavailable.”
All easy access ISAs were “temporarily unavailable” and the only easy access product available was Paragon’s.
While OakNorth made their change this week, the other providers have been changed for some time, and it is unclear if or when they will become available for new customers again. All the providers continue to serve existing customers.
But Monzo said the pause was “very short-term.” A spokesperson for the challenger bank said: “Across the industry, adding or amending products and offerings is a normal part of running a marketplace.”
Monzo announced the city watchdog probe alongside its annual results a fortnight ago.
The FCA is investigating the bank’s potential civil and criminal liability over possible money laundering rule breaches between October 2018 and April 2021.
“We’re cooperating with the FCA’s investigation, which is at an early stage,” Monzo said in its report.
The Financial Conduct Authority has been stepping scrutiny of potentially inadequate money laundering controls lately, and is currently investigating NatWest over criminal money laundering charges.
Launched in 2015, Monzo has attracted five million customers with its bright coral card and spend-tracking data, but has struggled to turn its popularity into profits.
The challenger bank has struggled to lure consumers from traditional high street banks to use Monzo as their main bank account.
Monzo’s annual results revealed that the bank had swung to a £130m loss, up from £114m last year.
The surge in losses was largely driven by a reduction in customers spending money whilst on holidays abroad – a key source of revenue for the bank – due to curbs on international travel.
OakNorth has been asked for comment.